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Protect your credit from thieves

After Target and Neiman Marcus told tens of millions of shoppers that their credit and debit card information had been stolen, the retailers offered them a year of free credit monitoring, Consumer Reports notes.

But that service does little more than give consumers a false sense of security because it does nothing to protect them from fraudulent charges on their credit and debit card accounts.

More than 85 percent of identity theft cases involve existing account fraud, according to the Department of Justice. Credit monitoring, security freezes and fraud alerts are designed to thwart much less common – but much more serious – new-account fraud.

In that type of identity theft, a crook uses your Social Security number and other personal information to open credit accounts in your name. If it happens to you, it’s worth considering credit monitoring, along with a security freeze or fraud alert. Consumer Reports explains what each does:

• A security freeze prevents most credit card issuers and lenders from reviewing your credit history. Without that, lenders probably won’t issue new credit, so criminals can’t set up fraudulent accounts in your name.

But it also shuts out most of those people who have a legitimate need to access your file, such as lenders you’ve asked for credit, telecom companies and insurers. To give them access, you have to lift the freeze.

A freeze is free in New York. In other states, it might be free, depending on your state and circumstances (for example, if you’re an identity theft victim). Otherwise, expect to pay $2 to $12 to initiate or lift a freeze at each credit bureau: Equifax (, Experian ( and TransUnion ( To review your state’s law, go to

When to use it. Freeze your credit files if you’re a victim of ID theft or if you think your Social Security number has been stolen. Consumer Reports also recommends that you place a freeze if you think you might become the victim of new account ID theft (say, because your wallet was lost or stolen) and you don’t mind the hassle and cost.

• A fraud alert is easier to initiate than a freeze, but it offers less protection. While a fraud alert is in place, your credit file will be accessible, but creditors must take reasonable steps to verify your identity before granting credit. You need to request a fraud alert at only one credit bureau; it will then notify the other two.

An alert lasts 90 days. If you’re an ID theft victim, you can keep one in place for seven years.

When to use it. Request an alert if you think you might become a victim of ID theft but don’t want to deal with freezes.

• Credit monitoring alerts you by email when there’s activity in your credit file.

When to use it. Consider monitoring if a company offers it free after a data breach. Otherwise, Consumer Reports doesn’t recommend paying for the service, which can cost about $170 to $360 per year.

Instead, check your credit reports for errors and fraud yourself. Federal law allows you to get one free report from each of the three major credit bureaus every year by going to Get a report from one bureau every four months.

How to respond to a breach

If you’re told your credit or debit card information has been stolen, Consumer Reports recommends that you ask your card issuer to change your account numbers; also monitor your billing and bank statements.

Report any unauthorized activity immediately. Sign up for alerts that notify you about major purchases or withdrawals from your accounts.

Watch for anyone who might use your stolen data to trick you into revealing your Social Security number or other sensitive information, perhaps by impersonating someone from a company you regularly do business with.

Check your credit reports for fraud regularly if you are or think you might become an ID theft victim.